Tuesday, February 14, 2012

Canadians should embrace higher energy prices

A bizarre title to an article written by John Manley, former federal Minister of a many things during the Chretien era, and current head of the Canadian Council of Chief Executives.

"The most effective means of promoting energy conservation is to allow energy prices to rise. It seems clear that higher prices will influence Canadians' behaviour in a way that public exhortation and appeals to the greater good have not.That is why the Canadian Council of Chief Executives has previously stated its support for a broad-based carbon pricing scheme in Canada. Canadians need to see the everyday cost of inefficient use of energy and be motivated to change their energy consumption patterns and investment decisions. To be sure, carbon pricing would have to be introduced gradually, both to allow businesses and consumers time to adjust and to avoid any disproportionate impact on Canada's competitive position.The bottom line is that governments must resist the temptation to shield Canadians from higher energy prices."

The overall theme is fine, but let's be clear: the approach of governments such McGuinty's in Ontario, is to deliberately increase the cost of energy. It's a fallacy that energy always goes up in price, and it is not a fallacy that energy is closely related to wealth and health.
Still, Manley hits the right notes on urban design, regulation at the time of production(/purchase), and the carbon tax argument has merits - although the point of a carbon tax isn't to make energy more expensive, but to facilitate the development of less carbon-intensive alternatives. Still, when the wealthy elite is encouraging a tax, it is likely to fund something to increase their wealth- and the article does coincide with another Conference Board of Canada opinion targeting the electricity sector.